Government report shines light on asbestos litigation

“Attention mesothelioma victims!” may be a familiar line you’ve heard on your television in between your favorite shows. Mesothelioma is a serious form of cancer mainly caused by inhaling asbestos and has caught the attention of lawmakers lately.

According to a U.S. government report, companies have set aside more than $30 billion for victims of mesothelioma since the 1980s. In fact, asbestos lawsuits have played a role in approximately 100 companies going bankrupt. One such company is a gasket manufacturer called Garlock. As part of its $1 billion bankruptcy case, a judge has slashed what the manufacturer owes asbestos victims after learning that the victim's lawyers abused the system.

"It's laid bare the massive fraud that is routinely practiced in mesothelioma litigation," Lester Brickman, told NPR. Brickman is a Cardozo law school professor who has researched asbestos litigation for over 20 years and who testified for Garlock.

In Texas, one plaintiff said his exposure to asbestos was from Garlock after his lawyers filed a claim with another company. Meanwhile, in California, another plaintiff's lawyers misled a jury to make Garlock look worse. In Philadelphia, lawyers made evidence of their client's exposure to 20 different asbestos products disappear.

"As Hodges says in his order, we were able to demonstrate in all — each and every one of those 15 cases — that there was extensive suppression of exposure evidence,” said Rick Magee, one of Garlock's attorneys.

Garlock convinced Judge Hodges to reduce the estimate for how much the company owes victims. The victims' lawyers argued that the company still owes $1 billion. However, in his January decision, Hodges wrote that that estimate is "infected with the impropriety of some law firms and inflated by the cost of defense."

Peter Kraus, managing partner of Waters & Kraus in Dallas, said, "There are some of those cases that involve my firm. So I know for a fact from those cases that the judge's description of what happened is simply not correct."

According to Kraus, Hodges took a radical approach with his decision. "It's very, very different from the rulings and findings by judges with more experience in this area."

But that argument doesn’t work for the Institute for Legal Reform at the U.S. Chamber of Commerce. "When you start building the case, when you start seeing more and more of these instances, you got to really question whether this is an outlier or not," said Harold Kim, the organization's executive vice president.

Kim said the case will be a wake-up call for other judges, which will lead to more accurate estimates of what companies really owe. The judge currently estimates that Garlock owes $125 million.